Sat, Oct 18, 2014 - Page 13 News List

Tong Yang chairman jailed for 12 years

AFP, SEOUL

A South Korean business tycoon was yesterday handed a heavy jail sentence for selling bad debt and inflicting huge losses on a vast number of individual investors.

Tong Yang Group chairman Hyun Jae-hyun was sentenced to 12 years in prison, the heaviest judicial punishment doled out to a South Korean businessperson since 1997.

South Korean courts have, in the past, been lenient to heads of business groups who have broken laws, citing their contribution to the nation’s economic development.

Yonhap news agency described the jail sentence as extraordinary.

Hyun was found guilty of ordering the group’s affiliates to issue corporate bonds and commercial papers worth 1.3 trillion won (US$1.2 billion) between February and September last year even though he knew that the companies would be unable to pay off the debts.

“This is a fraud on a spectacular scale which caused large financial losses to some 40,000 investors. The accused deserves a heavy punishment,” the Seoul Central District Court said in a statement.

The court also sentenced three others — all chief executive officers of Tong Yang Group subsidiaries — to between three and five years in jail for their involvement in the fraud.

Tong Yang Group is the nation’s 38th largest conglomerate with interests in construction, manufacturing and financial services.

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